Legislated (Statutory) Deductions
Eligible professional and managerial staff can expect to have some or all of the following deductions taken from their pay each month:
- Statutory Deductions - Employment Insurance (EI), Canada Pension Plan (CPP), Income Tax
- Canada Savings Plan
- Charitable donations
- Long Term Disability
- Joint membership
- Dental premiums
- Group Life Insurance
- Employee Paid Health premiums (Extended Health or UHIP)
- Parking Fees
Employment Insurance (EI)
Employment Insurance provides financial assistance when you’re unemployed and looking for work, and to Canadians who are sick, pregnant, caring for a newborn or adopted child, or caring for a relative who is critically ill.
Both employees and employers pay EI premiums; the amount is based on how much you make from insurable employment.
As with Canada Pension Plan (CPP), you pay EI premiums on earnings up to a certain amount. In 2013, the maximum contribution is $891.12.
For more information on Employment Insurance, see Service Canada – Employment Insurance (EI): http://www.servicecanada.gc.ca/eng/sc/ei/index.shtml.
Canada Pension Plan contributions are deducted from your employment income if you:
- Are 18 years or older, but younger than 70;
- Are in pensionable employment during the year; and,
- Do not receive a CPP or QPP retirement or disability pension.
Both employees and employers contribute to CPP/QPP. Your portion is deducted directly from your pay cheque, and your employer matches your contributions and these are remitted to the Canada Revenue Agency.
The Canada Pension Plan contribution amount is calculated based on your gross pensionable earnings up to a ceiling for the given year. The ceiling is called your maximum pensionable earnings (YMPE). In addition, you’re allowed to earn a certain amount of money before CPP must be deducted. This amount is called the year’s basic exemption (YBE).
The YMPE for 2013 is 51,100.00. The YBE is $3500. The YBE is divided evenly over regular pay periods. Everyone gets this exemption.
CPP is taken off your pay, each pay period, until you reach the maximum payments for the year. In 2013, the Annual Maximum Contribution is $2,356.20. When that happens is entirely dependent on your income.
|2013 CPP Rates|
|Annual Maximum Pensionable Earnings||$51,100.00|
|Maximum Contributory Earnings||$47,600.00|
|Maximum Annual Employee Contribution||$2,356.20|
You do not make contributions if you’re receiving a CPP disability or retirement pension. At age 70, you stop contributing, even if you haven’t taken your retirement pension and are still working.
For more information on Canada Pension Plan, see Service Canada - Canada Pension Plan (CPP).
Income tax will be deducted from your employment income based on the total claim amounts stated on the Federal and Provincial TD1 Forms - Personal Tax Credit Return and remit them to the Canada Revenue Agency.
When you start your job, you fill out a TD1 form. This is where you claim your eligible tax credits, which determine the amount to deduct from your pay for income tax.
All employees are also entitled to a federal tax credit and a provincial or territorial tax credit, which varies from jurisdiction to jurisdiction. This tax credit is built into the calculation of your taxes.
The federal and provincial Personal Tax Credits Return TD1 forms must be completed by new employees and submitted to their department. The information on these forms is used by the payroll department to determine the amount of federal and provincial or territorial income tax to deduct from an employee’s income.
You do not have to complete a new TD1 every year unless there is a change to your federal or provincial personal tax credit amounts.
Some of the deductions are legal requirements, while others have to do with company policy, but all are legitimate deductions from your pay cheque.
Company-compulsory deductions are part of your employment contract. Paying these deductions is a condition of your employment.
Your employer might offer programs to make it easy for you to put aside for savings or investments, with the amount deducted right off your pay cheque. Similar programs could provide easy ways to make donations. These are voluntary programs, put in place for your convenience, so you have the choice of whether to participate. Some common programs involve deductions to pay towards charitable donations.
Canada Savings Bonds Payroll Savings
The University of Toronto offers eligible appointed staff the Canada Savings Bonds - Payroll Savings Program.
The CSB Online Services offer a single point of access to employees’ online transactions such as registration, changes to existing accounts, purchases and redemptions.
To log on or register, click on CSB Online Services. Use your Employee Reference Card (PDF) to record your Plan Number, Organization ID, and Client ID. The University of Toronto Organization ID required to log on is 12212.
The deadline for registering for a new plan or contribution changes to existing plans can be made online until 8:00pm, November 1, 2012. Contributions to a new plan and changes to existing plans will begin the first pay in December 2012.
The Canada Savings Bonds Employee How-to Guide is designed to help Canada Savings Bond payroll subscribers. It is available at Central Payroll Department located at 215 Huron Street, 8th floor, or online (PDF).
Remember - throughout the year you can:
- check your plan activity
- receive annual statements online
- find out everything you need to know about Canada Savings Bonds
- redeem your bonds by going to csb.gc.ca/employees and by selecting CSB Online Services
- manage your Payroll Savings Plan by going to csb.gc.ca/employees and by selecting CSB Online Services
If you have any questions, contact Teresa Marchione at email@example.com or 416-946-3330.